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FedEx (FDX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

FedEx (FDX) closed at $117.01 in the latest trading session, marking a +1.93% move from the prior day. This change outpaced the S&P 500's 1.67% gain on the day. Meanwhile, the Dow gained 1.53%, and the Nasdaq, a tech-heavy index, added 2.08%.

FDX will be looking to display strength as it nears its next earnings release. In that report, analysts expect FDX to post earnings of $2.27 per share. This would mark a year-over-year decline of 54.69%. Meanwhile, our latest consensus estimate is calling for revenue of $16.90 billion, down 5.07% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.07 per share and revenue of $68.85 billion, which would represent changes of -41.56% and -1.22%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for FDX. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 2.17% lower. FDX is currently sporting a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that FDX has a Forward P/E ratio of 12.65 right now. For comparison, its industry has an average Forward P/E of 13.61, which means FDX is trading at a discount to the group.

It is also worth noting that FDX currently has a PEG ratio of 1.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Transportation - Air Freight and Cargo was holding an average PEG ratio of 1.7 at yesterday's closing price.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research